Joe borrowed $2000 from the bank at a rate of 7% simple interest per year. How much interest did he pay in five years?
The formula for simple interest is
A = P(1 + rt) where P is the Principal (money you start with),R is the rate/percent and T is time.
A = 2000(1 + .07(5))
A = 2000(1 + .35)
A = 2000 (1.35)
A = 700
The interest he paid should be $700.
To calculate the interest paid, we need to use the formula for simple interest:
Interest = Principal x Rate x Time
Where:
Principal = $2000
Rate = 7% = 0.07 (as a decimal)
Time = 5 years
Plugging in the values, we get:
Interest = $2000 x 0.07 x 5
Interest = $700 x 5
Interest = $3500
Therefore, Joe paid $3500 in interest over five years.
To calculate the amount of interest Joe paid in five years, we need to use the formula:
Interest = Principal * Rate * Time
Here, the principal is the amount Joe borrowed, which is $2000. The rate of interest is 7%, which can be written as a decimal as 0.07. The time period is five years.
Now we can plug the values into the formula:
Interest = $2000 * 0.07 * 5
Multiplying these numbers together gives us:
Interest = $700
Therefore, Joe paid $700 in interest over the course of five years.
I = PRT
I = 2,000 * 0.07 * 5
I = ?